Budget Lesson, Part 8

This time, I’m looking at our discretionary budget. These are the things that don’t have a fixed cost. Any individual item is largely optional, and, ultimately, we don’t track these purchases closely. At the beginning of the month, I pull this money out of the bank in cash, except for 1 category. When the discretionary budget is gone, it’s gone.

Groceries/Dining¬† – At the beginning of the week, we sit down with a meal planner and (Can you guess?) plan our meals.¬† The planner we use has a weekly calendar with a checklist below each day to build the grocery list.¬† At the bottom of the page is another checklist for staples that don’t apply to a specific day’s meal, like milk or snacks.¬†¬† We build the list, then transfer it to another sheet, broken out by grocery department.¬† That keeps me from having to criss-cross the store.¬†¬† I make one lap.¬† When I go to the store, I only bring that week’s grocery budget in cash,¬† so I keep close track of how much is going into the cart.¬†¬†¬† Recently, we’ve gotten so good at making our meals cheaply from scratch that I reduced our monthly food budget by $50.¬†¬† I enjoy good food, so I wouldn’t reduce this budget item if it was a sacrifice in quality.¬†¬† For example, the Rainbow Foods store-brand chips actually taste better than Lay’s for half of the price.¬†¬†¬† We stock up when things are on sale and cook creatively. ¬† Sometimes, if time has been too tight to make a meal plan, we eat solely from the pantry for a week, buying nothing but bread and milk. ¬† By sticking to the list, and not fearing the store’s brand, we are able to feed our family of 5 1/2 for $450 per month and still eat well.

Discretionary¬† – This is for the random things that come up, and some of the not-so-random.¬†¬† Toiletries, activity fees, admissions, and fund-raisers all come out of this fund.¬† At the end of the month, whatever is left gets tucked into a box and forgotten.¬†¬† When the box gets full, it goes to the bank to be applied to debt. There isn’t a lot to cut here, since this line-item is only $200.

Baby stuff¬† – This category is continually shrinking.¬†¬† Our middle kid is recently potty-trained and our youngest is trying.¬†¬† There is no baby food and no formula, just 1 pack of diapers every month.¬†¬† In 6 months, this category will be eliminated.

Gas/oil¬† – This is the single category that isn’t cash-based.¬†¬† It makes no sense to take the kids out of the car to pay inside, especially in the winter.¬†¬†¬† Also, all of the temptation is inside. It’s much better to spend the money at the pump.¬†¬†¬† There isn’t much we can do to reduce this, at the moment.¬†¬† Our next car won’t be a full-sized pickup, but we are several years from that purchase.¬†¬†¬† We’ve started clipping oil-change coupons to keep this down to the minimum amount possible.

Clothes¬† – We only allocate $15 per month for clothes.¬†¬† In a good month, we don’t spend it.¬†¬† We can’t eliminate it completely, because things do come up.¬†¬† Over the summer, I’m hoping to completely leave it alone to save up for a new(used) winter jacket for our older daughter, who doesn’t get hand-me-downs.

Blow Money¬† – This is the safety valve.¬† It can’t get reduced and still work.

We’ve now addressed out entire budget, including what we can do and have done to keep our costs under control.¬† Looking back, I don’t see too many cuts I’ve missed.